Etsy has experienced explosive growth in the last several years with almost 1 million new members joining and over 2 million new listings per month in 2013. With that rate of growth and the size of the Etsy community, it is an attractive place to sell your products if you sell the type of handmade and vintage items that Etsy is known for.

Etsy Growth

Costs of Selling on Etsy

Etsy FeesEtsy does not allow you to take advantage of their massive community of buyers for free. Much like ebay, it is not cheap to sell your products on Etsy. Costs of selling on Etsy is…

 $0.20 to list a single item for 4 months and 3.5% on the sale price.

So for example if you sell an item for $10, you’ll pay $0.35 plus $0.20 for a total of $0.55. That’s 5.5% in Etsy fees. You’ll also pay Paypal’s fees of $0.30 and 2.9%. Altogether on a $10 item, you’ll pay about $1.14 in fees which is over 11%. The percentage will vary if you sell products above or below $10 (since part of the fee is fixed),but it will never be lower than 8.4%

 

Validate Your Product on Etsy

Etsy SellingShopping communities like ebay and Etsy are great places to validate a product. With Etsy, you’ll be able to put your product in front of a large community fast by just listing the products for $0.20. You’ll be able to quickly test a few important aspects of selling your product:

  • At what price will your product sell?
  • At what price do you make a profit?
  • Can you keep up with demand?
  • Do your costs change as you sell higher quantities?

You should be able to get these questions answered and many more in several months of selling on Etsy. This is vital information to help you decide if it is worthwhile to continue selling your product or if you need to make changes to your costs and pricing.

 

When Is It Time To Move On From Etsy

Etsy may not be the ideal solution for the long term for all shop owners, especially those who have validated their product and are selling high volumes. If you’re selling over $1,000/month on Etsy, it’s probably time to consider opening your own website for several reasons:

  • Lower costs – Most sellers who do high volumes on Etsy will experience lower costs by selling on their own website. They will no longer have the per transaction fees that Etsy charges and will have the freedom to shop around for credit card processors other than Paypal to find a lower cost for credit card processing
  • Expand your customer base and followup – One of the benefits of selling on Etsy is you get access to a membership of people ready to buy. The downside is you ONLY have access to people on Etsy. Your reach doesn’t expand outside the Etsy website. There are other sites like Etsy to expand your customer base, but I’m recommending your own website because with your own website, you will have the ability to get more traffic from search engines and have complete control over your customer base. This will give you the ability to do more customized followup in the form of email marketing.
  • Build a brand and domain authority – Even though you can promote your shop and have your own shop name within Etsy, you are still promoting Etsy when you promote your store. It may be time to start building your own brand on your own domain. Domains build authority over time as they age and receive links and social shares on Facebook and Twitter. This domain authority is a long term asset to growing your business.
  • Create long term stability – If Etsy disappears tomorrow, your Etsy shop will go away with it and you’ll be left with nothing. This may seem unlikely, but they could instead raise their fees or change their rules and that could have a negative impact on your shop. As long as you are selling exclusively in an Etsy shop, you are at their mercy.

Use Shopify To Setup Your E-commerce Store

Many people will never leave Etsy because they think it’s too complicated to setup their own online store. It can be complicated, but there are services that simplify the process. One of the most popular services for people moving on from Etsy is Shopify. You can watch my video walkthrough and read my full Shopify review to get more details on how it works.

Shopify Review

Shopify will allow you to transition smoothly from Etsy to your own store for several reasons:

  • No startup fee – only a low monthly cost
  • Use your own domain name
  • Professional predesigned store themes so you can give your store a custom look
  • Easily manage inventory and product listings
  • Links up with Paypal and several other payment processors
  • Built-in customer followup
  • much more…

 

You Don’t Have To Leave Etsy Entirely

The goal shouldn’t be to remove yourself entirely from Etsy because there is still value in having an Etsy shop to get exposure. The goal should be to reduce the volume of sales you are doing on Etsy and gradually increase the sales volume on your own site. Your Etsy customers should be notified about your website and since Etsy probably doesn’t encourage this type of promotion on your shop, you may have to get old fashioned and put a slip of paper in each order you ship from your Etsy store or even call customers on the phone.

 

Are you about to make the transition from Etsy or already have? Comment below and share your experience.

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  • Thomas

    I’ve recently joined ListingDock, they are a great site to buy, sell and trade stuff. Got a couple of sales in the first week.

  • IrisWangStudio

    I think Etsy will fall apart from the inside due to their abusive “Marketplace Integrity” goons. The water looks great from the outside, but once you dip your toes in you will find things are not what they seem.

    They without any warning suspended our account on terms of “PRoblems with Items, Problems with pictures” and after I replied just hours later, showing pictures of all of our products and my gf and I running the shop together, they still refused to re-open our shop.
    After the initial shock passed that my hard work was wasted because of the click of some Etsy management goons mouse, I realized that really we are the lucky ones. There are so many people who have had similar circumstances happen after they were full-time etsy sellers, with children and mortgages.

    The treatment of Etsy to its sellers is completely unacceptable. It seems they are simply using us sellers to bring our clients and products to their site. And there are so many companies who are SO OBVIOUSLY not operating under Etsy’s so-called handicraft guidelines, yet are allowed to operate, because their sales are high and Etsy want’s their 3.5% +.20 per post.

    Anyways, I just wanted to let prospective sellers know that Etsy is NOT AT ALL a safe place to spend your time opening a store, and I would highly suggest searching for alternatives.

    -Shane and Iris
    -IrisWangStudio

    • http://WebEminence.com/ Ryan Bowman

      Thanks for the perspective, Shane and Iris. Sorry to hear about your troubles. This is an important point to consider when building a business or following on any third party site whether it’s eBay, Facebook, Etsy, or something else. You don’t have control over much of anything so it can all change in a heartbeat.

      I’m sure Etsy has good intentions with their “marketplace integrity” and people get caught in the crossfire. I can’t say for sure since I don’t have experience.

      This is one reason why it’s smart to diversify out into your own website, especially if you have a successful Etsy business. This is my “Long Term Stability” point that I mention above. Sellers who have to rely on Etsy to sell over the long term have to understand they are building Etsy’s business as well as their own.

      I’m sure you’ll find a way to move your business forward. Good luck!